The Daily Shot: 25-Nov-24
• Administrative Update
• The United States
• The United Kingdom
• The Eurozone
• Asia-Pacific
• China
• Emerging Markets
• Commodities
• Equities
• Credit
• Rates
• Global Developments
• Food for Thought
Administrative Update
Please note that The Daily Shot will not be published this Thursday and Friday (Nov. 28th and 29th).
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The United States
1. The US economic uncertainty index has been rising, …
… but Trump’s nomination of Scott Bessent as Treasury Secretary sparked a relief rally in both stocks and bonds.
– Equity futures:
– 10yr Treasury yield:
• The Treasury curve (2s10s) inverted again.
• After eight consecutive weeks of gains, …
… the dollar retreated.
• Gold is down sharply.
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2. The US Manufacturing PMI from S&P Global remained in contraction territory this month.
– However, manufacturers have become optimistic about future output.
– The strength of the US dollar has been weighing on export orders.
– Factories are hiring again.
• Growth in US services activity accelerated this month.
– Businesses are less inclined to raise prices.
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3. The U. Michigan consumer sentiment index was revised lower in the second half of the month.
• Here is the expectations index by political affiliation.
Source: @TheTerminal, Bloomberg Finance L.P.
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4. Economists have significantly raised their estimates for US consumer spending growth in 2025.
Goldman is even more upbeat than the consensus estimate.
Source: Goldman Sachs; @MikeZaccardi
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The United Kingdom
UK manufacturing activity unexpectedly fell into contraction territory this month due to weak demand.
Services growth has stalled, though new orders continue to expand.
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The Eurozone
1. As we saw last week, euro-area business activity weakened this month.
• Manufacturing:
– Germany (deep in contraction territory):
– France (worsening slump as demand crashes):
– Deteriorating factory employment at the Eurozone level:
• Services:
– Germany (unexpected contraction):
– France (rapid deterioration):
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2. The ECB has expressed concern over deteriorating fiscal conditions in several economies (2 charts).
Source: ECB
Source: ECB
Source: @financialtimes Read full article
• An output shock could boost debt ratios.
Source: ECB
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3. How exposed are European economies to higher US tariffs?
Source: Pantheon Macroeconomics
4. Here is Germany’s poll tracker.
Source: @financialtimes Read full article
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Asia-Pacific
1. Japan’s department store sales fell below last year’s levels, marking the first year-over-year decline since early 2022.
2. Singapore’s core CPI declined sharply last month.
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China
1. Economists continue to downgrade their projections for China’s inflation next year.
• Economists sharply raised their forecasts for China’s budget deficit next year following Beijing’s announcements of several stimulus programs and US elections.
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2. The November SMI report showed improvement in business activity this month.
Source: World Economics
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Emerging Markets
1. Let’s begin with Mexico.
• The Q3 GDP growth was revised higher.
Source: MarketWatch Read full article
• But economists see trouble next year.
• Inflation continues to moderate.
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2. Economists raised their projections for Brazil’s central bank rate at the end of 2025, anticipating the Selic rate next year to remain above its current level.
Source: @TheTerminal, Bloomberg Finance L.P.
3. Here is an overview of the IMF’s credit to the ten largest debtor nations.
Source: Codera Analytics
4. Finally, we have some performance data from last week.
• Currencies:
• Bond yields:
• Equity ETFs:
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Commodities
1. Speculative accounts have scaled back their long positions in gold.
2. Frozen orange juice prices continue to hit record highs.
3. Here is a look at last week’s performance.
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Equities
1 Goldman’s sentiment indicator keeps moving deeper into “stretched” territory.
Source: Goldman Sachs
• US futures positioning remains elevated.
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2. Options trading activity has been trending higher.
Source: @markets Read full article
• Retail investors’ call option bets have reached their highest level since 2021.
Source: Deutsche Bank Research
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3. Single-stock leveraged ETFs have been very popular.
Source: @markets Read full article
4. Momentum stocks continue to surge.
5. US equities’ CAPE Ratio is nearing the highest level since the dot-com bubble.
Source: multpl
6. The S&P 500 Top 50 ETF (XLG) held support but lagged the rest of the S&P 500.
Source: Aazan Habib, Paradigm Capital
• The equal-weight S&P 500 ETF (RSP) is starting to improve relative to XLG (top 50 stocks).
• The equal-weight S&P 500/SPX price ratio is entering a seasonally strong period.
Source: Damanick Dantes; Bloomberg
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7. Nvidia is now over 7% of the S&P 500 market cap.
Source: @financialtimes Read full article
8. Here is a look at the post-election fund flows by sector.
Source: Goldman Sachs; @WallStJesus
9. Next, we have some performance data from last week.
• Sectors:
• Factors/styles:
• Macro basket pairs’ relative performance:
• Thematic ETFs:
• Largest US tech firms:
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Credit
1. Here is an overview of fund flows across various fixed-income asset classes.
Source: Deutsche Bank Research
2. While the S&P 600 (small-cap) index points to high levels of leverage, the median leverage among S&P 600 companies remains moderate.
Source: @patrick_saner
3. This chart shows last week’s performance across credit markets.
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Rates
1. Economists now expect only 90 bps of Fed rate cuts in 2025.
Source: @TheTerminal, Bloomberg Finance L.P.
2. Treasuries are seeing substantial fund outflows.
Source: BofA Global Research
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Global Developments
Here is a look at last week’s performance.
• Currencies:
• Bond yields:
• Equity indices:
• USD-denominated equity ETFs:
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Food for Thought
1. Most popular payment methods in global e-commerce:
Source: ECDB Read full article
2. Quarterly US EV sales:
Source: @climate Read full article
3. Ratio of household debt to disposable income for selected economies:
Source: Torsten Slok, Apollo
4. US power capacity mix:
Source: @climate Read full article
5. Americans’ views on abortion:
Source: @bbgequality Read full article
6. Shoplifting surges while other crimes decline in the US:
Source: @BW Read full article
7. Most Googled fictional breakups that still resonate with Americans:
Source: Clash.gg
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